Market News

Sterling holds near one-month peak in wake of UK election - REUTERS

JULY 10, 2024


LONDON, July 9 (Reuters) - The pound was little changed on Tuesday, down very slightly from Monday's one-month peak as investors weighed up new political landscapes in Britain and France.

Sterling was unchanged from the previous day at $1.2804, down from Monday's one-month high of $1.2846, with traders also waiting for testimony from U.S. Federal Reserve Chair Jerome Powell later in the day.

The Labour party swept to power in a landslide in Thursday's election, promising stability after a volatile period that saw four Conservative Prime Ministers in five years.

The pound is one of the best performing currencies this year, largely due to the Bank of England holding interest rates higher than expected at the start of the year as wage and services inflation has remained high.
In recent days, signs of a slowdown in U.S. growth have weighed on the dollar and supported sterling. Yet investors and analysts say hopes for more stability have been helpful in the background.

"On the hope that UK politics can avoid the dramas and uncertainties associated with the Brexit, (Boris) Johnson and (Liz) Truss periods, we expect that GBP can continue its slow grinding recovery," Jane Foley, head of FX strategy at Rabobank said in a note.
Sterling was also flat against the euro , with the euro zone currency changing hands at 84.54 pence.
The euro has bounced around in recent weeks due to uncertainty about elections in France, which came to a close on Sunday and resulted in a hung parliament and a surprisingly strong showing for the left.


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